According to Mining News Pro -According to mandatory filing with the bourses, both CIL and NLC would have equal equity holding in the proposed JV, which would take up thermal power projects at pitheads of mines of the respective companies to ensure lower cost of power generation.

The target for the JV was to implement 2 000 MW of thermal power projects and 3 000 MW of solar power generation with deadlines ranging between 15 months to four years to complete these projects.

While details of the thermal and solar projects were still being worked out, it was expected that the CIL-NLC JV would invest an estimated $1.62-billion over the next four years to complete the power projects and fresh funds would be raised through a combination of debt and equity in a ratio of 70:30 as per standard guidelines set by the government for State-operated power plants.

The JV agreement between CIL and NLC would include all operational wholly owned subsidiaries of the former, as the plan was to set up solar power projects on land reclaimed after mining held by these subsidiaries, with the latter said to be holding 15 000 acres of such land, which had been reclaimed after opencast mining in these areas had run its life cycle.

While this would be a maiden foray into power generation by CIL, NLC was already at the forefront of leveraging its mining operations as it was operating a combined thermal generation capacity of 4 731 MW.

Officials said that the JV would gain the expertise of NLC in operating thermal power plants as well as its innovation in the use of lignite in operating new generation thermal power plants.

CIL operational subsidiary, Mahanadi Coalfields Limited has announced the setting up of a 160 MW thermal power plant in the eastern Indian state of Odisha, but it is not yet clear whether this project would be transferred to the new JV.

Industry sources pointed out that the foray into power generation would bolster CIL’s revenue streams, particularly as its ambitious plans to achieve a coal production target of one-billion tons a year by 2020 has now been put on the backburner.

Officials said that achieving the one-billion-ton-a-year mark was not feasible given various constrains on implementing new projects in time, land acquisitions and the absence of rail connectivity, and that though the target had not been abandoned, it was now more of an “aspirational target”.

During 2017/18, CIL had achieved a production of 567-million tons with a target of producing 630-million tons in the current financial year.